Griffiths Energy International Inc., a Calgary-based oil
exploration and development company, has pled guilty to the offence
of bribing a foreign official contrary to Canada's
Corruption of Foreign Public Officials Act. The company
has agreed to pay $10.35 million in fines for bribing a Chadian
public official with $2 million in exchange for securing three
contracts in Chad.
According to publicly disclosed information, between August 2009
and February 2011 Griffiths Energy entered into three production
sharing contracts with the government of the Republic of Chad,
providing exclusive rights to explore and develop reserves and
resources over a combined area of 26,103 km2 in southern
Chad. The contracts covered two oil basins for potential
development, oil discoveries, and numerous exploration prospects.
The company's prior management negotiated and executed these
contracts with two entities owned and controlled by a foreign
public official and his spouse.
Griffiths Energy changed its senior management in September 2011
following the accidental drowning of Brad Griffiths, the
company's chairman and co-founder. The current management
discovered suspicious contracts in November 2011 and voluntarily
disclosed to the Royal Canadian Mounted Police, the Public
Prosecution Service of Canada and the U.S. Department of Justice
that it had commenced an internal investigation into the nature,
circumstances and propriety of the contracts. The internal
investigation was supervised by a special committee of independent
members of the firm's board of directors and conducted by
external legal counsel and a forensic accounting firm. In May 2012,
Griffiths Energy disclosed that it was voluntarily sharing the
results of the internal investigation and cooperating with the
On January 22, 2012 in a Calgary court, Griffiths Energy pled
guilty under section 3(1)(b) of the Corruption of Foreign
Public Officials Act:
Every person commits an offence who, in order to obtain or
retain an advantage in the course of business, directly or
indirectly gives, offers or agrees to give or offer a loan, reward,
advantage or benefit of any kind to a foreign public official or to
any person for the benefit of a foreign public official
as consideration for an act or omission by the official in
connection with the performance of the official's duties or
to induce the official to use his or her position to influence
any acts or decisions of the foreign state or public international
organization for which the official performs duties or
The fine jointly recommended by the prosecutor and
Griffith's counsel has yet to be approved by the court.
Heightened Enforcement Environment
After a slow start, enforcement of Canada's anti-corruption
legislation is becoming much more active.
This conviction follows the conviction of Niko Resources,
another Calgary-based energy company, which was fined $9.5 million
in June 2011 for bribing a minister responsible for energy in the
government of Bangladesh. The RCMP has also indicated that it has
dozens of other ongoing investigations in progress. At the same
time, the Charbonneau Inquiry into corruption in the province of
Québec has raised media and public concern about domestic
corruption, creating an environment in which vigorous enforcement
can be expected.
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
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